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Supreme Court lets H-P/Compaq suit proceed
Class Action News | 2007/10/11 09:46

A class-action lawsuit alleging Compaq Computer Corp. sold defective computers can proceed, the U.S. Supreme Court ruled on Tuesday. Compaq, which was founded in 1982 and bought by Palo Alto-based Hewlett-Packard Co. (NYSE: HPQ) in 2002, was sued by Oklahoma residents who said the company sold defective computers and then refused to repair or replace them.

In June 2003, the state gave class-action status to the case which grew to include 1.7 million people who bought similar computers.

H-P is a major employer in Roseville.



Shareholder Class Action Filed Against Opteum Inc.
Class Action News | 2007/10/10 09:12
The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:

Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of Florida on behalf of all purchasers of the common stock of Opteum Inc. ("Opteum" or the "Company") pursuant or traceable to the Company's September 17, 2004 Initial Public Offering (the "IPO" or the "Offering") or the Company's December 16, 2004 Secondary Offering, and including those who purchased or otherwise acquired the Company's common stock between November 3, 2005 and May 10, 2007, inclusive (the "Class Period").

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbtklaw.com.

The Complaint charges Opteum and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. More specifically, the Complaint alleges that, in connection with the Company's IPO and Secondary Offering, defendants failed to disclose or indicate the following: (1) that the Company's interest costs at the time of the IPO and Secondary Offering were substantially increasing; (2) that as a result, the Company's various approaches to risk management did not provide investors reasonable protections against losses; and (3) that the Company lacked adequate internal and financial controls.

Additionally, throughout the Class Period, defendants failed to disclose additional material adverse facts about the Company's financial well-being, business relationships, and prospects. Specifically, defendants failed to disclose or indicate the following: (1) that the Company's integration of Opteum Financial Services, LLC ("OFS") was not proceeding according to plan; (2) that the Company's risk management controls and procedures were incompatible with OFS' risk management controls and procedures; (3) that OFS' loans were designed to produce short-term financial results, which would subject the Company to unreasonable long-term risk and expenses; (4) that the Company had improperly valued and monitored collateral; (5) that the Company had underreported its loan loss reserves; (6) that the Company's book value and projected cash flows were materially overstated; (7) that the Company had failed to adequately hedge its exposure to losses; (8) that the Company and OFS lacked adequate internal and financial controls; (9) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (9) that, as a result of the above, the Company's financial statements were false and misleading at all relevant times; and (10) that, as a result of the foregoing, the Company's guidance about its 2007 financial and operational results were lacking in any reasonable basis when made.

On May 10, 2007, the Company shocked investors when it reported its first quarter 2007 financial and operational results. The Company reported $12.2 million in negative fair value adjustments to OFS' mortgage servicing rights, $1.3 million in negative fair value adjustments to OFS' residuals, and $8.8 million in asset write downs at OFS. Additionally, the Company revealed that nearly 50 percent of the Company's first quarter loss, or $37.4 million, was attributable to a valuation allowance on OFS' deferred tax assets, nearly 17.5 percent of the loss was attributable to negative fair value adjustments to OFS' mortgage servicing rights and retained interests in securitizations, and slightly more than 10 percent of the loss was attributable to asset write downs at OFS, due in part to the Company's decision to exit the mortgage origination business. Also, the Company revealed that its quarterly loss included $14.1 million in negative fair value adjustments to mortgage loans held for sale and interest rate lock commitments, and hedging losses of $4.6 million. On this news, shares of the Company's stock fell $1.37 per share, or over 25 percent, to close on May 11, 2007 at $4.08 per share, on unusually heavy trading volume.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.

For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit http://www.sbtklaw.com.

If you are a member of the class described above, you may, not later than November 19, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action.



Judge allows class action over Target Web site
Class Action News | 2007/10/05 16:02
A federal judge granted class-action status to a lawsuit alleging that Target Corp. is breaking California and federal law by failing to make its Web site usable for the blind. The plaintiffs fault Target for not adopting technology used by other companies to make Web sites accessible to the blind. The technology allows reading software to vocalize invisible code embedded in computer graphics and describe content on a Web page. Granting class-action status allows blind people throughout the country who have tried to access Target.com to become plaintiffs in the suit, which alleges violations of the Americans With Disabilities Act.

Judge Marilyn Hall Patel also on Friday approved a separate class, made up of blind California residents who have attempted to use the site, to address the suit's charges that Target is violating state laws governing civil and disabled rights.

"This is a tremendous step forward for blind people throughout the country who for too long have been denied equal access to the Internet economy," said Dr. Marc Maurer, president of the National Federation of the Blind. "All e-commerce businesses should take note of this decision and immediately take steps to open their doors to the blind."

The federation filed the suit — which originally was filed in California state court in February 2006 and moved at Target's request to San Francisco federal court the following month — on behalf of federation member and northern California resident Bruce Sexton. The suit alleged that "blind individuals have been and are being denied equal access to Target stores" and the "service and benefits offered to the public through Target.com."

Judge Patel's order Friday noted that Target has modified its Web site some since the suit's filing to make the site more accessible to the blind. Target claimed the suit should therefore be dismissed, but Judge Patel ruled against that argument.

A Target official couldn't be reached for comment Wednesday morning.



Target Lawsuit Given Class-Action Status
Class Action News | 2007/10/03 13:17

A federal judge granted class-action status to a lawsuit alleging that Target Corp. is breaking California and federal law by failing to make its Web site usable for the blind. The plaintiffs fault Target for not adopting technology used by other companies to make Web sites accessible to the blind. The technology allows reading software to vocalize invisible code embedded in computer graphics and describe content on a Web page.

Granting class-action status allows blind people throughout the country who have tried to access Target.com to become plaintiffs in the suit, which alleges violations of the Americans With Disabilities Act.

Judge Marilyn Hall Patel also on Friday approved a separate class, made up of blind California residents who have attempted to use the site, to address the suit's charges that Target is violating state laws governing civil and disabled rights.

"This is a tremendous step forward for blind people throughout the country who for too long have been denied equal access to the Internet economy," said Dr. Marc Maurer, president of the National Federation of the Blind. "All e-commerce businesses should take note of this decision and immediately take steps to open their doors to the blind."

The federation filed the suit - which originally was filed in California state court in February 2006 and moved at Target's request to San Francisco federal court the following month - on behalf of federation member and northern California resident Bruce Sexton. The suit alleged that "blind individuals have been and are being denied equal access to Target stores" and the "service and benefits offered to the public through Target.com."

Judge Patel's order Friday noted that Target has modified its Web site some since the suit's filing to make the site more accessible to the blind. Target claimed the suit should therefore be dismissed, but Judge Patel ruled against that argument.



Class action suit against CPR over TCE leak
Class Action News | 2007/10/03 10:25
The Alberta Court of Appeal has approved a class action lawsuit against Canadian Pacific Railway (CPR) by residents of the Ogden area of Calgary, who are suing CPR for contaminating groundwater in the area with trichloroethylene (TCE). The residents claim that the subsurface contamination is causing toxic vapours to migrate into their houses, and are claiming several million dollars for diminution in property values.

Docken & Company, a Calgary law firm specializing in class action litigation, originally filed the environmental class action lawsuit against CPR in 2005 after TCE was detected in the groundwater underneath the Ogden community. The action, under the case name Windsor v CPR, alleges that the contamination was caused by the use of TCE at CPR's rail yard in Ogden. TCE, a colourless liquid, was used as a solvent for many years to remove grease from metal parts.


Refco Shareholders Sue Law Firm Over IPO
Class Action News | 2007/10/02 08:16

Refco Inc. shareholders on Monday sued the Chicago law firm that advised the company in its $583 million initial public offering in 2005, saying it knowingly participated in a fraud that "cost innocent investors hundreds of millions of dollars." The lawsuit is the latest salvo against the Mayer Brown firm, which served as Refco's chief legal adviser for a decade before the company collapsed into bankruptcy. The law firm also has been sued by a court-appointed bankruptcy administrator, and by the buyout firm Thomas H. Lee Partners.

The shareholders, led by the giant bond fund Pacific Investment Management Co., indicated for more than a year that they aimed to go after Mayer Brown, but previously refrained from identifying the firm in a class-action lawsuit against alleged perpetrators of the fraud that led to Refco's collapse. Last year, the shareholders said in court documents they expected to reach a settlement with Mayer Brown.

In their suit, filed with the U.S. District Court in Manhattan, the shareholders also listed Joseph Collins, a Mayer Brown partner, as a defendant. Mayer Brown employs about 1,400 lawyers in six countries. Collins is head of its derivatives group.

Collins wasn't available to comment Monday. In a statement, Mayer Brown said it intended to defend itself "with vigor" and is "confident of a positive resolution." It said it believes securities laws don't allow lawsuits to be brought "against an outside adviser where the company allegedly misrepresented its financial position."

Refco was once one of the biggest commodity brokerages in the United States. It collapsed in October 2005 - just two months after its IPO - amid allegations that its chief executive hid $430 million in bad debt. Federal prosecutors charged the executive, Philip Bennett, with fraud. Bennett, who was ousted from the company, pleaded not guilty. The company sold its key assets and has gone out of business.

Since then, a court-appointed official responsible for collecting funds on behalf of Refco's creditors has sued about dozen investment banks, accounting firms and other "insiders" that played a role in the company's IPO. The official, Marc Kirschner, has sought more than $1 billion in damages from those defendants, including Mayer Brown.

The Refco shareholders' allegations against Mayer Brown are similar to those in Kirschner's lawsuit. The shareholders said Refco's relationship with Mayer Brown began in 1994, when Collins brought the "Refco account" with him from a previous law firm. Because Mayer Brown billed Refco about $5 million a year, Refco was an "extremely lucrative" account.

The importance of that account led Collins to participate in a cover-up of "hundreds of millions of dollars" in bad debt at Refco, the shareholders' lawsuit said. Revealing those debts, by properly accounting for them, would have "threatened the company's survival" - and Collins' fees, the lawsuit said.

Collins became Bennett's "go-to guy" at Mayer Brown, working with him in "devising, documenting and concealing the massive fraudulent scheme that was intended to, and did, result in the false financial statements on which investors innocently relied."

"In return for tens of millions of dollars in legal fees from Refco, Collins and Mayer Brown abandoned their responsibilities as honest professionals and became willing participants in a fraudulent scheme that cost innocent investors hundreds of millions of dollars," the lawsuit said.



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